2012: The 'best' year for PH economy
By: Cai Ordinario
MANILA, Philippines - President Benigno Aquino III couldn't have said it
better: "This was the best year for the Philippines in a long time."
The country's economic growth surpassed the expectations of most
economists, including conservative multilaterals that have always been on the
safe side when making their forecasts.
The Philippines grew 7.1% as of the third quarter of 2012,
besting other countries in Southeast Asia and trailing behind only China and
Mongolia in the whole Asia.
This is the reason why some international organizations consider what
was once a "sick man" a new Tiger economy.
Growth drivers
Many Filipinos, including academics and businessmen, have pointed to
several factors that helped propel economic growth last year. Vice Chairman of
SM Investments Corp. and one of Forbes Asia's 50 most powerful businesswomen,
Teresita Sy Coson, said many factors led to this level of growth.
Sy said the growth drivers, among others, were the robust business
process outsourcing (BPO) industry, strong remittance inflows, and the
"energized spirit" of local businessmen.
DOLLAR RESERVES. A bank teller shows off dollar bills. Photo from AFP
Socioeconomic Planning Secretary Arsenio Balisacan, for his part, said
last year's strong economic growth could be attributed to good governance,
reforms, and improvement of the peace and order situation, particularly in the
labor sector and in Mindanao.
These factors, the National Economic and Development Authority Director
General said, allowed the Philippines to keep inflation and interest rates low
as well as reduce the deficit and debt as a proportion of gross domestic product (GDP).
"I think these 3 major elements have contributed to these major
revival in the interest in the economy and are likely going to sustain the
growth process in the coming years," Balisacan said.
Balisacan explained that Aquino's commitment to improve governance in
the country has given the Philippines the ability to take advantage of opportunities
it missed in the previous administrations. If only this commitment was evident
in the past 10 years prior to Aquino, he said the country could have performed
better.
Philippine President Benigno Aquino III during an interview with
Rappler, October 17, 2012.
He said poor governance issues prevented international investors from
taking the Philippines seriously as an investment destination in the past.
Regaining the trust of investors by reforming institutions was one of the
biggest reasons why the country is now considered a bright spot in Asia.
"After seeing that we really mean business in reforming our
institutions, our bureaucracies, proving the accountability of government in
spending money, things like that, I think that has changed the perception of
the country substantially and if you learn from the history of the past 100
years, economic development is all about good governance, without good
governance you really can't get development growing for a long period of
time," Balisacan said.
Another major factor, Balisacan said, was the cumulative impact of
reforms that started in the 1990s. These reforms included the reforms at the
Bangko Sentral ng Pilipinas, the liberalization of the banking sector, and the
deregulation of the oil, airline, and telecommunication industries.
Balisacan said the cumulative impact of these reforms allowed the
Philippines to open the economy to interested investors in 2012.
Apart from these factors, Balisacan noted that the country's peace and
order situation significantly improved. He said there were no labor strikes
that discouraged investors from bringing their businesses to Philippine shores.
The Department of Labor Secretary Rosalinda Baldoz was quoted in reports
as saying the number of strikes in the Philippines has not hit or exceeded 10 every
year for the past 6 years. In 2012, there were only 3 strikes
recorded.
Baldoz said that was only 1.4% of the total 207 notices of strike filed
before the National Conciliation and Mediation Board. The strikes were in Metro
Manila, Southern Tagalog and Central Luzon.
Apart from less strikes, Balisacan said the signing of the Bangsamoro Framework Agreement was the right step
in making Mindanao a true driver of economic growth.
Balisacan earlier said that with the Bangsamoro agreement, Mindanao can grow faster than the whole of Luzon.
He said the agreement will give birth to new investments in Mindanao in
agriculture and tourism as well as allied industries. He said Mindanao's
abundant natural resources make it the perfect "food bowl" and the
richness of the Muslim culture makes the region an attractive tourist
destination.
"The emerging peace and order that even in the labor unions, we
haven't been seeing much of those paralysing strikes, the problem with the Moro
Islamic Liberation Front (MILF), especially with the [Bangsamoro] framework
agreement, has improved tremendously the perceptions of risk in this
country," Balisacan said.
"I have a strong belief that at least under this presidency, which
is very serious about achieving finality and closure to all these conflicts,
Mindanao could be an investment haven because the potential for that region is
enormous for agro-tourism, even industrial development," he added.
Sustainability issue
The Philippines has a long way to go to make its growth sustainable,
however. The main challenge is the creation of more quality jobs.
The Labor Force Survey (LFS) results released by the National Statistics
Office showed that there were a total of 2.763 million Filipinos without jobs
in October 2012, 120,000 more compared to the year before, but 79,000 less than
in July 2012.
The LFS also showed that the number of underemployed Filipinos reached
7.158 million, 223,000 less than the number a year ago, and 1.388 million less
than in July 2012.
The unemployed is internationally defined as persons, 15 years old and
over, without work, seeking work and available for work. On the other hand, the
underemployed are those of the same age who are already employed but want to
have additional hours of work in their present job or an additional job.
In October, Balisacan said providing Filipinos decent jobs has been the single biggest challenge of the
administration. High quality jobs will grow the economy and give
more Filipinos a better shot at increasing their incomes, keeping them out of
poverty.
In the 2009 poverty statistics data released by the National Statistical
Coordination Board (NSCB), the country's poverty incidence increased to 26.5%,
equivalent to 3.86 million families, in 2009 from 26.4%, 3.67 million families,
in 2006.
"Job creation is a major challenge and what the numbers are telling
us, we really need to push more aggressively, improving further the investment
climate because jobs cannot be created without investment," Balisacan
said.
"If you look closely at the numbers, it's true that the number of
people actually increased but what is quite encouraging to see is the quality,
the growth of employment in high quality jobs, has actually improved. The
growth there and the salary workers has increased and that's more than 50% of
the total employed workforce and we want to see more of that while we are
creating more employment opportunities in those high quality jobs," he
explained.
To create decent jobs and achieve inclusive growth, the country must grow its manufacturing base, said Asian
Development Bank's country economist in the Philippines, Norio Usui. - Rappler.com
Source: http://www.rappler.com/business/18816-2012-the-best-year-for-ph-economy#disqus_thread
MY INSIGHTS:
From the article that I have read, I am happy and pleased to know that
2012 made a better change for the economic status of our country. It gains
positive feedbacks to international economists and at the same time encourage
Filipinos to be more aware on the growth of our economy. It also attracts many
investors to invest and build businesses in the Philippines. Our administration
did a great job in the constant change that we have experienced. They somehow
change the impression of some critiques on how they managed and transform our economy
form the past administration and now that they imposed misplaced fiscal
austerity measures. I also noticed that from a bad administration, our
President made sure that in his term he will implement what he usually says “matuwid
na daan” that those corrupt officials were to be accused guilty of the
wrongdoings that they have made from the past administration. As he was
continuously doing these, I have observed that he also make ways on how to
increase our GDP and decrease the unemployment in one. He catches the attention
of some foreign investors to invest in our country and in return they investors
gain good businesses to Filipinos. With these, the unemployment rate of our
country decreases because of the new business that our investors have brought
to us. And also, the GDP of the Philippines increases for the new investments
that our country has been receiving. The poor governance before that discourages
investors is now gone on PNoy’s administration.
As a Filipino citizen, I commend the administration to continue what they are doing whether on the government's issues or for the betterment of our economy. I know that we Filipinos are tired of hearing those corrupt officials keep denying what they are doing, I hope that PNoy will keep his promise on "matuwid na daan" and that more investors will be attracted to invest here in the Philippines. Those unemployment rate will continue to decrease so that many Filipinos will have a job and that every family can now eat 3x a day and can afford to send their children at school.
I suggest to the government that our country should have more industrial businesses so that those Filipino people who were not professionals or college graduates will have there chance and opportunities to have a work and be able to support their family even on a minimum wage. Also, there will be more educational projects and that Philippine education will improve and more standardized.
So in this coming election, we should vote for those officials that can also implement these kind of work and that this year 2013 will be a big surprise to us Filipino people.
